Credit Assessment: BOOJUM LTD

1. Credit Opinion: DECLINE

Reasoning: Boojum Ltd presents an unacceptably high credit risk for conventional lending facilities. The company is deeply insolvent with shareholders' funds of -£4,996,915 as at June 2024, and this deficit has grown consistently from -£1.1M over five years. The dramatic cash depletion from £2.59M to £684K in a single year, combined with overdue statutory accounts, signals acute financial distress. The company is entirely dependent on its parent group (Azzurri) for ongoing solvency, and any withdrawal of group support would likely trigger insolvency.

2. Financial Strength: CRITICAL WEAKNESS

Balance Sheet Deterioration: | Year | Net Assets/(Liabilities) | Shareholders' Funds | Cash | |------|--------------------------|---------------------|------| | 2019 | -£1,100,868 | -£1,100,878 | £292,725 | | 2020 | -£3,127,307 | -£3,127,317 | £1,045,714 | | 2021 | -£3,762,840 | -£3,762,850 | £450,637 | | 2022 | -£4,455,590 | -£4,455,600 | £464,760 | | 2023 | -£4,878,926 | -£4,878,936 | £2,587,140 | | 2024 | N/A | -£4,996,915 | £683,729 |

Key observations: - Total liabilities exceed total assets by nearly £5M – the company is technically insolvent on a balance sheet basis - The deficit has grown approximately £390K year-on-year (2023 to 2024), indicating ongoing trading losses or revaluation impacts - Share capital stands at only £10, meaning the entire deficit sits in accumulated losses (P&L reserve) - Total liabilities reached £13.99M against assets of £9.03M – a gearing position that cannot be sustained without external group support

Group Structure Risk: PSC analysis shows Azzurri Bidco Limited and Azzurri Investment Group Limited control the company. The Azzurri Group underwent a pre-pack administration in 2020. While this restructuring preserved the trading operations, it demonstrates the group's vulnerability to financial distress and the potential for intercompany liabilities to be written off or restructured at creditor expense.

3. Cash Flow Assessment: SEVERELY COMPROMISED

Liquidity Position: - Cash fell 73.6% from £2.59M (April 2023) to £683K (June 2024) – a reduction of £1.9M - This cash burn rate is alarming and suggests either significant capital expenditure, trading losses, or intercompany cash extraction - No turnover figures are disclosed for recent periods (micro/small company exemptions), making trading profitability impossible to assess independently

Working Capital Concerns: - With net current liabilities likely substantial (given the overall deficit position), the company cannot meet obligations from its own resources - The business is entirely reliant on group funding facilities to continue as a going concern - Any restriction on group cash flow would immediately cascade to this subsidiary

Sector Context: The licensed restaurant sector (SIC 56101) faces structural headwinds including labour cost inflation, energy prices, and changing consumer behaviour. As a burrito chain (formerly Burrito Co. Limited), Boojum operates in a highly competitive fast-casual segment with thin margins and high fixed costs.

4. Monitoring Points

If any facility were considered (secured only, with parent guarantee), the following would require ongoing surveillance:

Filing Compliance: The accounts are currently overdue. This is a significant governance failure and may indicate: - Disagreement with auditors over going concern status - Administrative difficulties within the group - Potential qualification issues

No further credit should be considered until compliant accounts are filed and reviewed.